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MASTER’S DISSERTATION
FUAD JAFARLI AGIL
Ganja-2022
AZERBAIJAN STATE AGRICULTURAL UNIVERSITY
MASTER’S TRAINING CENTER
“Improving the economic efficiency of the use of natural
resources in agriculture”
On the theme
Master’s Dissertation
Master's degree: Economics - 060404
Master's specialization: Agricultural Economics
Author: Fuad Jafarli Agil_____ Scientific Leader: PhD, Assoc.
Prof. Sevda Hajiyeva Tofig____
Head of the Department: PhD,
Assoc. Prof. R.R.Mustafayeva_ Head of the MTC:
A.S.Mustafayev ____________
Ganja-2022
1
Abstract
The dissertation work analyses the situation in our daily life, in which the proportion of the
worldwide countries are dealing with the problem related to the efficiency of natural
resources. The work clearly defines the terminology of the efficient usage of land and water
resources. It explores the socio-economic impact on land and water resources. Taking into
account the growing growth of the world's population, the correct use of basic natural
resources is very important. In the second part of the dissertation, the author starts to describe
current agricultural development of Azerbaijan including statistical data. As well the
distribution of the total land fund by purpose in terms of land resources, and the protection
and use of water resources within the territory of Azerbaijan Republic are clearly indicated.
Paper argues that, it will be important for Azerbaijan to continue the policy of rational and
efficient usage of natural resources in the agricultural sphere. It will boost the long-term
impact of resources and increase the total economic impact. Additionally, a survey conducted
among farmers in two economic zones of Azerbaijan shows the current situation of resource
use and the figures in the form of info graphics were included in the dissertation work. The
third part describes the experience of efficient use of water and land resources in developed
countries and to some extent compares the foreign experience with the current situation in
Azerbaijan. Furthermore, the paper indicates ways of improving economic efficiency by
various tools, in particular in the agricultural sector.
Keywords: natural resources, land, water, economic efficiency, Azerbaijan.
Xülasə
Dissertasiya işində dünya ölkələrində təbii sərvətlərin səmərəliliyi ilə bağlı problemlə məşğul
olduğu gündəlik həyatımızda vəziyyət təhlil edilir. Əsərdə torpaq və su ehtiyatlarından səmərəli
istifadə terminologiyası aydın şəkildə müəyyən edilmişdir. Müəllif, torpaq və su ehtiyatlarının
sosial-iqtisadi təsirini araşdırmışdır. Dünya əhalisinin artımını nəzərə alsaq, əsas təbii
ehtiyatlardan düzgün istifadə çox vacibdir. Dissertasiyanın ikinci hissəsində müəllif statistik
məlumatlar da daxil olmaqla Azərbaycanın kənd təsərrüfatının cari inkişafını təsvir etmişdir.
Həmçinin Azərbaycan Respublikasının ərazisində ümumi torpaq fondunun təyinatına görə
torpaq ehtiyatlarının bölgüsü, su ehtiyatlarının mühafizəsi və istifadəsi aydın şəkildə
göstərilmişdir. Sənəddə qeyd olunur ki, Azərbaycan üçün kənd təsərrüfatı sahəsində təbii
ehtiyatlardan səmərəli istifadə siyasətinin davam etdirilməsi mühüm əhəmiyyət kəsb edəcək.
Bu, resursların uzunmüddətli istifadəsini artıracaq və ümumi iqtisadi təsirini artıracaqdır.
Bundan əlavə, Azərbaycanın iki iqtisadi zonasında fermerlər arasında aparılan sorğu resursdan
istifadənin mövcud vəziyyətini göstərir və dissertasiya işinə infoqrafik formada məlumatlar
2
daxil edilmişdir. Üçüncü hissədə inkişaf etmiş ölkələrdə su və torpaq ehtiyatlarından səmərəli
istifadə təcrübəsi təsvir edilir və xarici təcrübə ilə Azərbaycanın hazırkı vəziyyəti müəyyən
dərəcədə müqayisə edilir. Bundan əlavə, yazı işində müxtəlif vasitələrlə, xüsusən də kənd
təsərrüfatı sektorunda iqtisadi səmərəliliyin artırılması yolları göstərilir.
Açar sözlər: təbii ehtiyatlar, torpaq, su, iqtisadi səmərəlilik, Azərbaycan.
3
Table of Contents
ABSTRACT ......................................................................................................1
INTRODUCTION……………………………………………….……………4
Chapter I THE NATURE AND THEORETICAL-METHODOLOGICAL
BASIS OF THE CONCEPT OF NATURAL RESOURCES VALUE
1.1. What is economic efficiency? Theoretical and methodological foundations
for the effective use of natural resources in agriculture…...............................7
1.2. Methods of economic evaluation of natural resources, their advantages and
disadvantages……………………………………………………………….…..11
1.3. The ways of calculation of land and water resources efficiency…………..16
Chapter II THE CURRENT SITUATION OF USE OF THE MAIN
NATURAL RESOURCES IN THE AGRICULTURAL SECTOR IN
AZERBAIJAN
2.1 Current situation of Agricultural development of Azerbaijan……………...21
2.2. Economic efficiency of the use of land resources in the agricultural sector of
Azerbaijan….............................................................................................23
2.3. Economic efficiency of the use of water resources in the agricultural sector
of Azerbaijan ….......................................................................................31
Chapter III SOLUTIONS TO INCREASE THE ECONOMIC
EFFICIENCY OF USING NATURAL RESOURCES IN AGRICULTURE
3.1. Experience of effective use of water and land resources in developed
countries………………………………………………………………………41
3.2. Ways to improve the efficiency of the use of natural resource potential in
agriculture. ………..............................................................................................55
RECOMMENDATION AND CONCLUSION……………………………......63
THE LIST OF USED LITERATURE……….....................................................68
4
INTRODUCTION
The actuality of the subject
The problems of efficient use of the potential of natural resource in agriculture
have become particularly relevant in the last four decades. This is primarily due
to the intensification of land degradation processes, the accumulation of harmful
pollutants in water and soil, the aggravation of the environmental situation in the
field of nature management, the imperfection of economic methods for
regulating the use of natural resource potential and the insufficient development
of its economic parameters. All this requires a reassessment of the existing
system of organizing agriculture and the development of new approaches to the
use of environmentally and economically acceptable technological schemes in
agricultural production, which will increase the level of efficiency of the
agrarian economy and achieve food security in the country.
In addition, in connection with the transition of the republic to a market
economy, the study of the problem of rational use of natural resource potential
and its practical implementation becomes an objective necessity. This fully
applies to agriculture, which has an important place in the economy of the
republic and provides the needs of the rapidly growing population with food and
the processing industry with raw materials. Therefore, in the context of the
transition to a market economy, the issues of effective use of the natural
resource potential of the agricultural sector are put forward as one of the most
important problems for the sustainable development of the national economy.
In modern conditions, the saturation of the market with agricultural products,
industry - with raw materials, mainly depends on scientifically based schemes
for the effective use of the natural resource potential of agriculture. Meanwhile,
in agriculture, mainly natural factors determine the practical framework in
which the producer, in principle, must decide how to use productive resources
efficiently.
5
To solve this issue, along with the theoretical and methodological aspects of the
use of natural resource potential, its qualitative and quantitative assessment is
necessary.
In this regard, it is urgently required to search for new directions for the efficient
and reasonable use of natural resource potential in the agricultural sector of the
republic, contributing to the increase in agricultural production, more profitable
for producers, less labor intensive in their production and meeting the
requirements of sustainable agricultural development.
All of the above determines the relevance of the chosen topic of the dissertation
work and confirms its practical significance and scientific value.
The purpose of the dissertation
The purpose of the dissertation research is to develop and substantiate scientific
and practical proposals for assessing the current state and efficiency of the use
of natural resource potential, the introduction of appropriate mechanisms to
stimulate it in a market economy.
In accordance with this goal, the following tasks were set and solved:
- explore theoretical and methodological issues of increasing the efficiency of
the use of natural resource potential as the basis for the development of the
country's agrarian economy;
- identify the types and criteria for the efficiency of land use in agriculture
according to its main contents;
- assess the current state, dynamics and trends in the use of natural resource
potential in the agriculture of the republic;
- to identify the features of the demographic transition of the republic, leading to
an aggravation and limitation of the use of natural resource potential in
agriculture;
- disclose and substantiate the basic principles of rational use of natural resource
potential, allowing to ensure the reduction of the negative impact of economic
activity when using land, water and other resources;
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- determine the main directions for increasing the efficiency of the use of natural
resource potential in the agriculture of the republic.
Object and Subject of research
The object and subject of the study are agricultural enterprises, farms, joint-
stock companies, water management organizations and, in general, agriculture
of the republic, which grow crops mainly on irrigated lands. The subject of the
study is a set of organizational and economic relations related to the efficient use
of natural resource potential in agriculture of the republic.
Research methods
The basis of the study was the fundamental principles of the concept of
sustainable development, the works of the classics of economic science, the
works of foreign and domestic economists on the problems of substantiating the
effectiveness of the use of natural resource potential in agriculture. The
materials of the Ministry of Agriculture, the Ministry of Land Reclamation and
Water Resources, the Ministry of Economy, the State Statistics Committee of
the Republic of Azerbaijan, reports of agricultural enterprises and water
management organizations, as well as the results of direct observation of the
dissertator were used as the source material. The following research methods
were used in the dissertation: abstract-logical judgment, monographic,
comparative analysis, correlation-regression analysis and other traditional
methods of economic and statistical analysis.
The structure and the volume of the dissertation
The dissertation consists of an introduction, three chapters, conclusions and
suggestions, a list of references. It is set out in 71 pages of computer text,
illustrated with 6 tables. The list of references includes 30 sources.
7
CHAPTER I. THE NATURE AND THEORETICAL-
METHODOLOGICAL BASIS OF THE CONCEPT OF NATURAL
RESOURCES ECONOMIC EFFICIENCY
1.1. What is economic efficiency? Theoretical and methodological
foundations for the effective use of natural resources in agriculture
According to the opinion of most researchers, "efficiency" is a very complex
economic category, the most important both in terms of theoretical aspects and,
even more so, in practice.
Only with a full understanding of the economic essence of the concept of
"efficiency" can it be used and applied to real business entities, determining the
degree of economic efficiency of their capital investments, production itself,
distribution network, operating activities, etc.
Translated from Latin, "effective" - giving a result, effective, productive, in
general terms, shows processes, phenomena, and developed systems.
Efficiency is an indicator of development. Moreover, it can be defined as his
driving stimulus. It serves as a goal that company managers are guided by when
making management decisions, giving these very decisions the necessity and
validity. When considering the concept of "efficiency" from an economic point
of view, it is important to define a term very close to it - "effect". By "effect" is
meant the expected result of some purposeful process. For example, if we
consider production, then the result of its activity will be a certain product with a
certain set of characteristics designed to satisfy the needs of the consumer. Thus,
the product here can be considered the primary effect of production.
For the first time, the concept of "efficiency" was introduced into economic
theory by Harrington Emerson, an American scientist, a representative of the
scientific management school. In his famous work "The Twelve Principles of
Productivity", dated 1911, he defines efficiency as: "the most favorable ratio
between total costs and economic results." Emerson raised and substantiated the
question of the need and expediency of applying an integrated and systematic
approach to solving practical problems of production management and any
8
activity in general. ―True performance always produces maximum results under
minimum conditions; tension, on the contrary, gives rather large results only
under abnormally severe conditions.
In modern economic science, issues of financial stability and financial condition
of enterprises are of great importance. Therefore, the application of economic
theory to practice is aimed at increasing the financial performance of financial
and economic activities with some reduction in the use of technical indicators.
First of all, this is due to the strengthening of financial relationships of
companies with government agencies and other enterprises, as well as financial
independence and self-sufficiency, the strengthening of the impact of successful
production activities on the financial stability of enterprises.
To the greatest extent, the requirements for assessing economic efficiency are
met by such an indicator as labor productivity (A.I. Ilyin). As a criterion for the
effectiveness of the production and economic activities of an enterprise, it is
most often called.
The most important indicator of production efficiency is labor productivity - the
productivity of workers in the production process (A.S. Golovachev).
Another scientist holds a different opinion, actually referring to the indicator of
profitability: The most important economic result of the market activity of an
enterprise, taking into account the long-term prospects for its development, is to
obtain the maximum return on invested capital (N.A. Safronov).
In accordance with the laws of the market, it is impossible to identify the
efficiency of production with labor productivity. The growth of labor
productivity reflects the use of only consumed resources (current costs), while
the increase in production efficiency characterizes the use of all resources,
including current and one-time costs.
Profit characterizes the economic effect‖, but is not an indicator of economic
efficiency and believes that ―to determine the efficiency of an enterprise, it is
necessary to compare the results (in this case, profit) with the costs or resources
that provided these results (I.V. Sergeyev).
9
At the same time, it is practically important which profit indicator should be
used when calculating profitability indicators. When determining the
profitability of sales, products (costs), it is advisable to use the profit from sales.
It makes sense to calculate the return on assets on the basis of profit before tax,
as it will characterize the efficiency of using assets in the ordinary (operating)
and non-core activities of the organization; profitability of production assets - by
profit from sales.
Thus, there is a difference of opinion in the use of one or another indicator for
evaluating the effectiveness of labor productivity or profitability. At the same
time, as rightly pointed out in the textbook ed. S.F. Pokropivny, ―the production
process at any enterprise is carried out with the proper interaction of the three
factors that determine it: personnel (labor force), means of labor and objects of
labor. Using the available means of production, the personnel of the enterprise
produces socially useful products or provides industrial and domestic services.
This means that, on the one hand, there are costs of living and social labor, and
on the other, certain results of production (activity). The latter depend on the
scale of the means of production used, the personnel potential and the level of
their use.
―Economic efficiency is understood as a comparison of the result or effect in
terms of value with the available resources (material, labor, financial,
information) and the costs incurred to achieve these results‖ (A.N. Solomatin).
At the same time, unlike a number of other sources, it is proposed to distinguish
not only the economic effect and economic efficiency, but also the concept of
economic result.
The difference between the categories of economic result and economic effect,
according to A.N. Solomatin, consists in the fact that in the first case we are
talking about the absolute value of any indicator characterizing the activities of
the enterprise, for example, the volume of trade, the volume of purchased goods,
etc., and in the second case, the difference between the results of economic
activity and the costs incurred to receive them. And although the difference
10
between these concepts is significant, it is indicated that indicators
characterizing both the results of activities and the economic effect are used to
assess economic efficiency.
Natural resources are means of subsistence without which man cannot live and
which he finds in nature. These are water, soils, plants, animals and minerals
that we use directly or in a processed form. They give us food, clothing, shelter,
fuel, energy and raw materials for the operation of industry, from which man
creates comfort items, machines and medicines. Some types of resources, such
as minerals, can only be used once (although some metals can be recycled).
These types of resources are called exhaustible or non-renewable resources.
They have finite reserves, replenishment of which on Earth is almost impossible.
Firstly, because there are no conditions in which they were formed millions of
years ago, and secondly, the rate of formation of minerals is immeasurably
slower than their consumption by man.
Other types of resources, such as water, "return" to nature again and again, no
matter how much we use them. These resources are called renewable or
permanent resources. They are reproduced in the natural processes taking place
on Earth and are maintained in a certain constant amount, determined by their
annual growth and consumption (fresh water in rivers, atmospheric oxygen,
forest, etc.).
It is often very difficult to draw a line between renewable and non-renewable
resources. So, for example, plants and animals, if used wastefully, without
caring about the consequences, can disappear from the face of the Earth.
Therefore, in this regard, they can be classified as non-renewable resources. On
the other hand, flora and fauna have the ability to reproduce themselves and,
with reasonable use, can be preserved. Thus, in principle, these resources are
renewable.
The same can be said about soils. With rational management of the economy,
soils can not only be preserved, but even improved and increase their fertility.
On the other hand, the unreasonable use of soils leads to a drop in their fertility,
11
and erosion often physically destroys the soil layer, completely washing it away.
That is, in many cases, the renewability or non-renewability of natural resources
is determined by the attitude of a person towards them.
Now a person in his economic activity has mastered almost all types of
resources available and known to him, both renewable and non-renewable.
1.2. Methods of economic evaluation of natural resources, their advantages
and disadvantages
In economic science, the following conceptual approaches to the construction of
an economic assessment of natural resources have developed:
1) Costly (the amount of costs for the development of a natural resource)
2) Rental (determining the effect of using a natural resource in the form of rent)
3) Mixed (the amount of costs for the development of natural resources and the
effect of their use)
The economy has a wide arsenal of methods for the economic evaluation of
natural resources, which make it possible to express the usefulness of natural
resources in monetary form. In connection with the specifics of the political and
economic line of development of our state (the period of the USSR), in relation
to the economic assessment of natural resources, a different view was formed on
its content and practical significance. Initially, its formation was greatly
influenced by the theory of labor value, according to which value is created only
by living labor. Since natural resources are free goods, for a long time they were
not included in the orbit of cost (value) relations. Such a factor as the limited
nature of natural resources, the need to stimulate their efficient use, bypassed.
However, practice gradually showed the need for an economic assessment of
natural resources and the "inclusion" of the latter in the system of value relations
of nature management.
In connection with the need to take into account the whole variety of usefulness
of nature, later new concepts of the economic evaluation of natural resources
appear, designed to change the traditional idea of the value of nature, and,
consequently, the ecological behavior of man.
12
1. Features of the cost method
The essence of the cost approach to the economic evaluation of natural
resources: economic evaluation is based on the necessary costs associated with
the development (preservation) of a particular resource for its exploitation and
reproduction. If we sum up the costs of preparing and using a natural resource,
then this value can be taken as a starting point in determining the price of the
resource.
Advantages (advantages of this concept):
1) evidence: with the "costly" concept, according to which developed natural
resources acquire the cost of their development costs, we can agree, since at
present there are practically no natural resources that can be involved in the
economic turnover without previous expenses for their development;
2) simplicity
3) the possibility of wide use.
The cost approach can be used to estimate the cost of recreating a natural good
when it is lost or degraded. In this case, compensatory potential costs are
calculated that are required to replace a lost or damaged resource with an
identical one in a given or alternative location. For example, if a fertile (soil)
layer is withdrawn or destroyed as a result of mining, then the minimum
economic assessment of the lost or degraded soil will be the cost of restoring the
fertility of this site (reclamation).
The cost approach can also be used to evaluate rare species of animals and
plants: all types of costs for the reproduction and normal existence of a given
species are summed up.
Despite the relative simplicity and the possibility of widespread use, the cost
approach contains a fundamental contradiction.
The disadvantages (disadvantages of this concept) are as follows:
1) The resulting value of the economic assessment does not take into account the
cost of natural resources in their natural state;
13
2) According to the "cost" principle, the price of a natural resource will be
determined by costs and thus justify any, even the most inefficient investment in
its development;
3) The better the quality of the natural resource, the lower the assessment in
accordance with the cost concept it will receive. The costs of developing an
economically low-quality, hard-to-reach natural resource, as a rule, are greater
than those of a more efficient one. Thus, the best land in the country requires
less preparation and use in agriculture than a plot of similar size, which requires
additional costs for clearing shrubs, removing stones, etc. There is a paradox:
the higher the quality of the resource, the less costs are needed for its
development, and as a result, its economic assessment is less.
These shortcomings significantly limit the application of the cost approach to
the economic evaluation of natural resources.
In the 60s of the twentieth century, Academician S. G. Strumilin, for the
economic valuation of land using the cost method, proposed the following
formula, which took into account the heterogeneity of certain plots of land
(1.1)
Where Oz - economic evaluation of 1 hectare of land, manats; R is the cost of
development of 1 hectare of land in modern conditions (average for the
country), manats; U/T and U*/T* – the ratio of yield to the cost of producing an
agricultural product on the assessed site and the national average, respectively.
It follows from the formula that the basis for the economic assessment of natural
resources is the cost of labor and funds for their development (involvement in
economic turnover), and the quality of natural goods acts as an additional factor
in the measure of value.
2. Features of the rental method
The most extensive theoretical substantiation and practical solution has the
rental concept, which appeared as a counterbalance to the costly one.
14
The essence of the rental approach to the economic valuation of natural
resources: the economic valuation of natural resources is based on determining
the effect of the use of a resource in the form of rent (regardless of past costs for
the development of these resources).
Usually, economic rent is understood as the price (or rent) for the use of natural
resources, the reserves of which are limited.
Rent in Latin ―reddita‖ means "given back, returned." In economic science, rent
is understood as a type of income regularly received from capital, land, property
and not related to entrepreneurial activity.
The rent concept is based on the calculation of differential rent.
In nature-exploiting industries, along with the best natural resources, there are
also worse ones (in terms of quality and location). The additional product arising
from the use of limited natural resources of the best quality and location is called
differential rent and is the basis for estimating natural resources using the rental
method. Differential rent is considered as the difference between the social and
individual cost of a natural resource. The value of differential rent can be
determined on the basis of prevailing prices for natural resources or on the basis
of calculations. Differential rent is determined by:
- By the difference in the cost of production of the best and worst lands;
- By the difference between production prices and cost;
- By the difference in the net income of enterprises operating in different
conditions;
- By the difference between the values of products obtained during the operation
of the resource and the standard level of individual reduced costs for its
production.
In the domestic practice of economic calculations, one of the most common
methods for determining differential rent is the method of closing costs. K.G.
Hoffman for the rental valuation (R) of all types of natural resources suggests
using the following formula
R = max [К*q* (Z-ρ)], (1.2)
15
Where Z - closing costs, man.; ρ - direct costs for products obtained during the
exploitation of a natural resource, man.; q - coefficient of "productivity" of a
natural resource, taking into account the qualitative and quantitative aspects of
the resource; K is a coefficient that takes into account the time factor.
Pros:
1) Rent estimates take into account the limited resource;
2) Better resources have a higher cost;
3) The rental valuation of natural resources, in contrast to the cost valuation,
takes into account all additional costs arising from the loss of a resource, and not
just the direct costs of replacing a retired resource with a new one.
Minuses:
1) when assessing natural resources at closing costs, the question also arises of
how to evaluate resources that find themselves in the worst economic conditions
(worst resource sources receive a zero rating, although their use may be
economically feasible.);
2) the difficulty of determining the value of closing costs, which do not always
determine the level of market value;
3) simplification of the evaluation model for closing costs (which does not take
into account the influence of many factors).
The problem of rent in modern conditions is extremely complex and relevant.
The traditional interpretation of natural resource rent in the face of growing
shortage of natural resources requires new approaches to its interpretation.
3. Features of the mixed (cost-rent) method
Between the rental and cost concepts arose, a mixed approach to the assessment
of resources. Its supporters noted the narrowness of the cost and rent concepts
aimed at solving a single problem, while, in their opinion, a mixed approach
gives the most complete assessment of the natural good.
In order to give an assessment of the worst resources, the supporters of this
approach propose to sum up the costs of developing natural resources and the
monetary effect from their use. The essence of the mixed approach to the
16
economic valuation of natural resources: the economic valuation of natural
resources is based on the economic effect they bring (differential rent) and the
costs of their development (reproduction)
Opr = Zo + D, (1.3)
Where, Zo - the costs of development (preservation) of natural resources,
manats; D - differential rent manats.
Pros: Allows you to evaluate the worst natural resources.
Minuses:
1) incorrect summation of costs and results, re-calculation (expenses for the
development of a resource - the lower limit of its assessment, differential rent -
the maximum allowable amount of additional costs for the growth of a
resource);
2) the complexity of comparing costs at different times (one-time and current)
and rent;
3) the concept was only an attempt to mechanically combine cost and rental
approaches.
1.3. The ways of calculation of land and water resources efficiency
Land use efficiency in agriculture
The results of agricultural production depend on the efficiency of the use of
production resources, primarily land.
The economic efficiency of using land as a means of production is characterized
by the results of comparing the volume of production on it with its area or value.
But, given the special nature of this resource (limited size, long renewal period,
etc.), other factors are also taken into account when determining the
effectiveness of its use. In modern conditions, it is necessary not only to increase
the yield of products per unit area, improve its quality, reduce the cost of
producing its unit, but at the same time maintain or increase soil fertility, and
ensure environmental protection.
The economic efficiency of land use is characterized by a system of indicators.
The main ones are cost.
17
Land yield (Ly) is expressed as the ratio of the value of the gross agricultural
output of the GO to the value of land resources Vl, man.:
(1.1)
When assessing land resources, you can use the market price of land or cadastral
value.
Land capacity is the inverse of land yield. It can be defined as the ratio of the
value of land to gross agricultural output, manats:
(1.2)
The economic efficiency of land can be expressed in the volume of gross and
marketable agricultural or crop production per unit of land area, man.:
(1.3)
Where VO, VOc are the value of the gross output of agriculture and crop
production, manats;
MP, MPc - marketable products of agriculture and crop production, man.;
S — area of agricultural land, ha.
Another indicator of land use efficiency is gross income per unit of land area,
man.:
(1.4)
Where VI - value income, man.; is equal to the difference between the cost of
gross output and material costs (VI = GO - MC).
Efficiency also characterizes the amount of net income per unit of land area,
man.:
(1.5)
Where NI - net income, man.; equal to the difference between the cost of gross
output and its cost (NI = GO - C) or between gross income and the amount of
wages (NI = VI - WA).
Profit from the sale of agricultural products per unit of land area, manats:
(1.6)
18
Where P - profit, man.; is equal to the difference between the proceeds from the
sale of products and its full cost (S - FC).
When comparing the efficiency of land use, indirect indicators can be used:
natural and relative.
Natural indicators:
• Productivity of agricultural crops, centers per 1 ha;
• Production of the main types of crop production (grain, sugar beets, potatoes,
etc.) per 100 ha of arable land, centners;
• Production of milk, meat of cattle and sheep in live weight, wool per 100 ha of
agricultural land, centners;
• Production of pig meat in live weight per 100 ha of arable land, centners;
• Production of poultry meat, c, and eggs, thousand units, per 100 ha of grain
crops.
Relative indicators of land use:
• The share of agricultural land in the total land area;
• Tillage of agricultural land (share of arable land in the structure of agricultural
land);
• The share of intensive crops (rowed, industrial) in the structure of crops;
• Share of irrigated land in the area of agricultural land. The considered system
of indicators comprehensively and fully characterizes the effectiveness of the
use of agricultural land. At present, it is low and there are significant reserves
for its growth.
The main role in improving the efficiency of land use in the current conditions
belongs to the state, which must, firstly, develop and implement targeted
programs to preserve land, prevent their reduction and misuse, and secondly,
contribute to changing the general economic conditions that create the basis for
expanded reproduction and intensification of agriculture, the realization of the
advantages of property relations and the market mechanism of management.
19
The calculation of water efficiency
Lastly, all of the mentioned performance indices can be integrated into a single
concept: overall agronomic water use efficiency,
Fag =
(1)
Where P denotes production of crops (total dry matter or marketable
commodity, as applicable) and U denotes the amount of water applied. Since
mere not a considerable portion of the seed absorbs and uses the water that is
added to it, different components of the denominator U must be considered:
U = R + D + Ep + Es + Tw + Tc (2)
where R measures the rate of water loss owing to field runoff, D is the amount
of water that has been drained below the root zone (deep percolation), Ep is the
quantity of water lost due to the evaporation during transportation and
application to the field, and Tw is the volume transpired by weeds, and Tc is the
volume transpired by the crop. Es is indeed the amount of water vaporized from
the soil's layer (mostly between the rows of agricultural plants), Tw indicates
about weeds transpire a large amount of water, and Tc is the volume transpired
by the crop. All of these volumes are around the same unit.
Accordingly:
(3)
Over-irrigation causes major erosion, evaporation from open water, and weed
transpiration in flood irrigation, which are widely used strategies for river
diversion. These losses are usually 20 to 30 percent of the water used, based on
my experience. Furthermore, water loss underneath the root field due to seepage
can be as high as 30% or even 40% of the total water used. As a result, the
percentage of a crop that is actually consumed is frequently, just under 50%, and
in some cases as low as 30%.
If free water leakage and overt water vapor are avoided, evaporation out from
surface of the soil reduced (as with partial irrigation, which prevents locations
between rows that are moist) and weeds are effectively managed, and water is
20
used in metered amounts commensurate with the needs of the plants to avoid
excessive seepage, all losses can be reduced to less than 20% of total water
consumption. Irrigation effectiveness will then achieve or even exceed 80%.
Last but not least, crop and variety choice which is judicious, optimum tillage
and fertilization as well as the right harvesting and planting dates all can
enhance method of calculation of quadratic formula (i.e., the achievable yield).
In general, irrigated agriculture's agronomic quality of water usage can be
considerably improved over conventional practices' low efficiency.
21
Chapter II CURRENT SITUATION OF ECONOMIC EFFICIENCY OF
USE OF NATURAL RESOURCES IN THE AGRICULTURAL SECTOR
IN AZERBAIJAN
2.1 Current situation of Agricultural development of Azerbaijan
The government of Azerbaijan for the duration of the long period will pursue a
policy aimed at diversifying the economy. And in this context, one of the most
important vectors for the implementation of this strategy is the development of
agriculture in the republic.
It is generally known that despite the almost 10-year catastrophic economic
collapse that hit the agricultural sector of Azerbaijan, its role in the domestic
economy remains significant.
State policy to stimulate the non-oil sector of the Azerbaijani economy is
implemented in agriculture through the implementation of large-scale complex
programs aimed at improving the socio-economic situation in the region.
Although Azerbaijan is one of the countries successfully fighting the COVID-19
pandemic, the problems in the global economy have not passed our country.
During the first 9 months of 2020, Azerbaijan's non-oil exports decreased by 9.2
percent. Despite the decline in non-oil exports, growth in agricultural exports
was maintained during this period. Thus, in January-September 2020,
agricultural products worth $ 501.2 million were exported. The volume of
exports of agricultural products increased by 0.2% in value terms compared to
the same period last year. In general, in January-September 2020, 39% of non-
oil exports were agricultural products. It should be noted that despite the 3.9
percent decrease in the country's gross domestic product (GDP) in January-
September 2020, the total volume of agricultural production increased by 1.5
percent compared to the same period last year. During this period, the share of
value added in GDP in the agricultural, forestry and fisheries sector was 7.6
percent.
The President of the Republic of Azerbaijan signed a decree on March 19, 2020
"On reducing the negative impact of the pandemic of coronavirus (COVID-19)
22
and the resulting sharp fluctuations in world energy and stock markets on the
economy, macroeconomic stability, employment and entrepreneurship in the
country." The successful implementation of the Order "On a number of
measures" has played an important role in ensuring the dynamic development of
the agricultural sector. By the way, the Action Plan approved by the Cabinet of
Ministers to ensure the implementation of this Order identifies the main
priorities of the state's economic policy in the medium term in order to maintain
economic growth and employment through the expansion of domestic demand
and create new jobs. At the same time, along with the construction sector,
mining industry, petrochemical industry, digital economy, transport, trade and
logistics, telecommunications, domestic tourism, the selection of agriculture and
processing industry as a priority sector is also important for the country's food
security.
The slowdown in economic growth in the world economy in recent years, the
significant increase in price volatility in commodity markets, especially the
coronavirus pandemic that began in early 2020 and the associated socio-
economic activity in many countries have created new challenges for the
Azerbaijani economy. The Government of Azerbaijan responded promptly to
these calls by saying, ―A number of measures will be taken to reduce the
negative impact of the Coronavirus (COVID-19) pandemic and, consequently,
sharp fluctuations in world energy and stock markets on the economy,
macroeconomic stability, employment and entrepreneurship approved the
Action Plan to ensure the implementation of the Order of the President of the
Republic of Azerbaijan. At the same time, agriculture and processing industry
were also selected as priority sectors. As we know, agriculture in the Republic
of Azerbaijan has a great potential and plays an important role in the
development of our country. The country has a rich history and unique tradition
of livestock, crop production, including the production of technical crops such
as cotton, tea and tobacco. Successful agrarian reforms in the country have led
to dynamic development in this area. Growth in agriculture was 6.6 percent in
23
2015, 2.6 percent in 2016, 4.2 percent in 2017, 4.6 percent in 2018 and 7.2
percent in 2019. As a result of sustainable development of agriculture, our
country's position in the Global Food Security Index has consistently increased
over the past 7 years. In 2019, Azerbaijan ranked 53rd in the report and was
ranked in the top ten among Asian and Pacific countries for food security.
2.2 Economic Efficiency of the Use of Land Resources in the Agricultural
Sector of Azerbaijan
During the entire period of the existence of agricultural production, land
remained the most important means of production, so the elasticity of the supply
of products in this industry was not high. To expand production, it is necessary
to increase the area of cultivated land, additional capital investment to introduce
the latest scientific achievements to improve soil fertility and the latest
production technologies, which leads to a decrease in the dependence of
production on the land to a certain extent. Therefore, depending on how
skillfully and efficiently the land is used, the pace and scale of production
depend.
At the beginning of the 20th century in the Azerbaijan SSR there was a special
state body for managing land resources – Azerbaijani State Committee of the
Lands, which did a lot to establish socialist land relations. In subsequent years of
Soviet power, the Main Department of Land Use and Land Management of the
Ministry of Agriculture of the Azerbaijan SSR played a leading role in land
management, relying on the land divisions of other departments.
With the formation of Azerbaijan as an independent state, the development and
implementation of radical economic reforms began. They were based on the idea
of denationalization of state property, which means the transfer of objects
belonging to the state to the ownership of citizens and non-state organizations.
The most important part of the economic transformations was the land reform,
which embodied the idea of land privatization, the rejection of exclusive state
24
property. First of all, the land reform affected the agrarian sector and agricultural
land.
To carry out land reform in the republic, a legal framework was created with the
adoption of the necessary laws and other legislative acts. In 1995-2018, more
than 30 laws and regulations regarding land and reform were developed and
adopted. The laws ―On Peasant (Farmer) Farms‖, ―On the Fundamentals of
Agrarian Reform‖, ―On Reforming State Farms and Kolkhozes‖, ―On Land
Reform‖, ―On State Land Cadaster, Land Monitoring and Land Management‖,
―On Land Fertility‖, ―On Entrepreneurship‖, ―On the Land Market‖, ―On Land
Tax‖, ―On Land Lease‖, ―On Territories and Lands of Municipalities‖, etc.
The process of land reform in the republic was carefully prepared; all its
elements were worked out scrupulously. During the preparatory period, the
experience of foreign countries that effectively solved the problems of land
relations was studied. Foreign specialists also took part in the development of
the concept and recommendations on land reform. The land reform carried out
in the country was aimed primarily at changing the forms of ownership and
forms of management. This, on the whole, corresponded to the general strategy
for transforming the economy of the republic.
The land reform gave impetus and created the conditions for the intensive
development of the previously not so significant institution of land ownership.
In the republic, land reform was carried out in stages, evaluating the results of
the previous stage, in order to make decisions at the next stage. The last large-
scale reforms began precisely after the adoption of the law "On Land Reform"
on July 16, 1996. The privatization of 2005 farms was carried out, the state
monopoly on land and other means of production was liquidated, state,
municipal and private property was created. On the basis of 41 collective farms
and state farms, state seed-growing and breeding farms have been established.
Of the unified agricultural land fund of the country, 42.6% was kept in state
ownership, 25.4% was transferred to municipal and 32.0% to private ownership.
Each family on average has about 1.6 hectares of land.
25
According to the land and civil legislative acts of Azerbaijan, the owners of land
plots have the right to make any transactions in relation to their plots, at a
contractual price, to contribute as a contribution to the charter fund of an
economic entity, to pledge, to donate, to bequeath, to lease, that is, they can
dispose of it at their own discretion without obtaining any permission from the
state authorities.
The presence of a variety of forms of ownership, including private, was also
determined by the new constitution adopted in 1995. In general, conditions have
been created in the country for civil circulation of land. Thus, the land acquired
a complex legal status, becoming a special kind of real estate, which combines
the features of a natural object and commodity-material value. This means that
in the Republic of Azerbaijan land is now an object of not only land relations,
but also civil ones. Recognition of land as immovable property is a formal basis
for including the right to own land in the category of property rights and
extending to this area the approaches, principles and decisions applied to
property ownership relations in general. In particular, the content of the right of
ownership of land is the power of possession, use and disposal.
The land and civil legislation of the Republic proceeds from the principle of
limited freedom of action and the discretion of the owner in possession, use and
disposal of landed property. This principle is based on the understanding that the
right of ownership exists along with other rights and interests of society, the
state, citizens and must be balanced with them. With regard to private property,
this principle is enshrined in the Constitution of the Republic of Azerbaijan,
which reads: ―possession, use and disposal of land and other natural resources
are carried out by their owners freely, if this does not damage the environment
and does not violate the rights and legitimate interests of other persons.‖
The current land legislation proceeds from the idea of abandoning the right of
exclusive state ownership, which implements the state's monopoly on land, and
replacing it with a variety of forms of ownership: state, municipal, private.
26
The right of state property means belonging to the powers of possession, use,
disposal by the state. The state as a subject of state property rights is represented
not by one department, but by a number of different state authorities, between
which the powers of ownership are distributed.
State-owned lands can be privatized subject to prohibitions and restrictions
established for certain categories of lands.
State lands can be transferred to individuals and legal entities for use on the
basis of the rights of fixed-term and perpetual use, lifetime inheritable
possession, lease. Land users are responsible for the rational use of land,
preventing their degradation.
The right of municipal ownership of land is the authority of possession, use,
disposal, belonging to the municipality. Local self-government bodies have the
right: to transfer land plots for temporary and permanent possession and use by
individuals and legal entities; lease, sell, alienate land owned by the
municipality, and make other transactions.
The procedure for transferring objects of state property to municipal property is
regulated by the laws of the Republic of Azerbaijan. Unlike state property,
municipal property is not divided into types. She is one. The management of
municipal land property is entrusted to local bodies, within the structure of
which subdivisions are created that are responsible for the maintenance and
regulation of the use of land occupied by roads, control over land use,
landscaping and landscaping, etc.
Municipal lands are predominantly classified as lands of settlements, with the
exception of lands located outside urban and rural settlements. The main areas
of municipal property belong to the lands of common use and are used by
citizens for the passage, passage, placement of the necessary objects of common
use. Other categories of land may be assigned to individual land users. The law
allows the privatization of municipal lands. The procedure and conditions for
privatization are determined by local self-government bodies. Funds from the
27
sale of municipal property are received in full to the local budget. It is not
allowed to privatize public lands in settlements.
The right of private property means that the right to own, use, dispose of land
plots belongs to individual specific individuals or legal entities that act as
subjects of the right to private ownership of land.
Respectfully, according to the subjects, the right of private property is divided
into two types: the right of private property of individuals and the right of
private property of legal entities. The objects of private property rights are land
plots of only certain categories of land. The most liberal in this sense is the legal
regime of agricultural land, on which the right of private property is not actually
limited. In contrast, the right of private ownership cannot be established on the
lands of the forest fund, lands occupied by defense facilities, lands of common
use in settlements, and some others.
Land plots can be transferred by their owners to other persons for temporary use,
for rent, or alienated through transactions of purchase and sale, inheritance,
donation, exchange, transfer as a contribution to statutory funds, may be the
subject of a pledge. Owners may also voluntarily give up their land or may
combine it with other owners' land to create common property. If necessary, the
powers of possession, use, and disposal may be limited by the state. Land plots
that are in private ownership may be withdrawn for state, public or municipal
needs in accordance with the established procedure and subject to compensation
for their value. In certain cases of offenses, as a punishment, the owner may be
deprived of ownership in accordance with a court decision without
compensation.
Individuals who own land plots under the right of private ownership have a
number of responsibilities. They must pay land tax in a timely manner, submit
information to state bodies on the condition and use of land, effectively use land
in accordance with its intended purpose, etc.
The right of private property arises as a result of various kinds of transactions -
the sale and purchase of land, privatization, barter, donation, inheritance, and
28
mortgage. The right of private property is certified by a certificate of state
registration of private property rights. The right of private property arises from
the moment of such registration.
State management of land resources is a peculiar and rather complex mechanism
for regulating social life, directing the actions of various subjects to implement
the land policy of the state, to maintain the values, norms, and traditions
developed in the process of historical development of land relations. Different
political cultures, not to mention different administrative systems, require
different managerial decisions. Undoubtedly, when setting the course of public
administration of land resources in the Republic of Azerbaijan, it is necessary to
be aware of all the new ideas and experiments carried out in other countries, but
this knowledge should be the basis for adapting good practices to specific
conditions, and not for imitation.
The competence of local self-government bodies in the field of regulation of
land relations is determined by the Constitution of the Republic of Azerbaijan;
land legislation, legislative acts on local self-government.
The land management system is traditional as an integral part of the unified
system of state management of land resources; it was the main link in the state
management of land relations in the republic. Unfortunately, with the new land
relations, the demand for various types of land management work has changed.
The first stage of the land reform in Azerbaijan was characterized by the
transformation (reorganization) of collective farms and state farms, the creation
of farm (peasant) farms on their territory. To this end, over the years, mainly
work has been carried out on inter-farm land management and the redistribution
of land to various categories of landowners and land users. In the near future, we
should expect a significant expansion of work on intra-farm land management,
land protection and other measures that ensure an increase in the efficiency of
land tenure and land use. In the modern conditions of Azerbaijan, there is an
increasingly urgent need to optimize management activities in state structures of
the land management system based on taking into account a wide range of
29
factors. Fundamental changes in land relations, the adoption of new legislative
acts and standards for their implementation, the implementation of land reform
necessitates the reform and reorganization of the organizational structure,
content and principles of the functional activities of the land management
service. If this does not happen, then the land use reforms carried out over the
years will lose all meaning.
In parallel with the above, when managing land resources in the Republic of
Azerbaijan, it is also necessary to ensure compliance with land legislation at all
levels of government. In the republic, the functions of land management at
different levels and by different branches of government are divided. Part of the
management function belongs to the competence of the legislature, and part - to
the competence of the executive and judicial authorities. The competence of the
legislative authorities of the republic includes the adoption of legislative and
legal normative acts in accordance with the Constitution of the Azerbaijan
Republic, land legislation, other laws of the republic.
According to article 6 of the Land Code of the Republic of Azerbaijan, the
competence of state authorities in the field of regulation of land relations
includes:
- Preparation of proposals for the improvement of the land legislation of the
Azerbaijan Republic;
- Adoption of regulatory legal acts that ensure the implementation of land
legislation and the introduction of amendments to them;
- Establishment of rules for conducting the state land cadaster, monitoring and
land management;
- Transfer, in accordance with the procedure established by this Code and other
legislative acts, of state-owned land plots for use and lease, and their receipt
back in order to meet state and public needs;
- Redemption or compulsory redemption in the manner prescribed by the land
code and other legislative acts of land plots that are in private ownership;
30
- Establishment of rules for determining the minimum areas of land plots that
can be taken for state registration;
- Assignment of lands to categories and their transfer from one category to
another;
- Transfer of summer and winter pastures for use to administrative-territorial
units;
- Establishment of land tax rates, rules for their payment and benefits in the field
of land tax withholding;
- Development and implementation of state programs for the rational use of
land, increasing their fertility, protecting land resources and other measures for
nature protection;
- Conducting a state environmental review of activities related to the use of
state-owned lands, and making a decision to suspend the construction or
reconstruction of an object without a positive conclusion from the state
environmental review;
- Organization and implementation of state control over the use of land in
accordance with the law and their protection;
- Organization of the state land cadaster, monitoring, land management;
- Resolution of land disputes specified in the Land Code, which must be
resolved out of court;
- Implementation of other powers established by legislation.
On the whole, two main groups of land management methods in the republic can
be distinguished: administrative-legal and economic, with their inherent
measures of influence on the subjects, objects and management environment.
The Table 1 shows the distribution of the total land fund in the Republic of
Azerbaijan. The statistics committee of Azerbaijan provided on the basis of its
purpose. It can be clearly seen that lands which were suitable for agriculture in
total has increased, whereas non-agricultural lands overall decreased slightly.
There is a necessity to use rationally the land resources, which is done by our
Government in the proper way.
31
Table 1: Distribution of the total land fund by purpose (end of year,
thousand ha)
2005
2010
2015
2016
2017
2018
2019
2020
Total land
area of the
country
8660,0
8660,0
8660,0
8660,0
8660,0
8660,0
8660,0
8660,0
Including:
Lands
suitable for
agriculture
– total
4758,6
4766,8
4769,8
4772,9
4777,5
4779,5
4779,7
4780,1
From that:
Perennial
plantings
221,5
227,4
237,0
241,1
246,8
255,0
260,3
272,7
Hayfields/
pastures
2693,9
2655,3
2595,1
2532,9
2436,2
2426,6
2423,4
2423,0
Non-
agricultural
lands –
total
3901,4
3893,2
3890,2
3887,1
3882,5
3880,5
3880,3
3878,7
Including:
Forest
areas
1037,8
1040,7
1040,3
1040,3
1040,3
1040,2
1040,3
1040,4
Flooded
lands
394,1
394,5
394,5
393,0
393,8
394,6
394,6
394,8
other lands
2469,5
2458,0
2455,4
2453,8
2448,4
2445,7
2445,4
2446,2
Source: According to the State Committee for Land and Cartography of the Republic of
Azerbaijan until 2014, the State Committee for Property Affairs of the Republic of Azerbaijan
since 2015, and the State Service for Property Affairs under the Ministry of Economy of the
Republic of Azerbaijan from 2020.
2.3 Economic Efficiency of the Use of Water Resources in the Agricultural
Sector of Azerbaijan
The current stage of economic and social development of our country is
characterized by the increasing involvement of water resources in the sphere of
human activity. The intensive development of economic activity in the basins of
32
many rivers has led to an increase in irretrievable losses of runoff and, as a
result, a decrease in the water content of rivers.
In addition to the quantitative depletion of surface and groundwater resources in
areas of intensive economic activity, there is an increase in the concentration of
pollutants in many watercourses and water bodies of the country, i.e.,
deterioration in the quality of surface waters. Under these conditions, the
greatest attention should be paid to the issues of rational use of the country's
water resources, their protection from pollution and depletion.
Under the water resources of any territory in the broad sense of the word, we
mean the total reserves of all types of water in various phase states located on its
surface and in the thickness of the soil. For direct use in the national economy,
only a relatively small part of the total water reserves - fresh water - is suitable.
Therefore, when assessing the water resources of a territory, the availability of
its fresh waters is considered.
Unlike other types of natural resources, the reserves of which are constant in any
territory, water, under the influence of solar energy and gravity, is in constant
motion - the cycle. It is continuously consumed and renewed, uniting the waters
of the atmosphere, the ocean, the earth's crust and the biosphere into an
interconnected cycle.
The runoff within the Azerbaijan Republic varies from 120–150 mm in the
basins of the river. The runoff within the Azerbaijan Republic is changing from
120–150 mm in the basins of the Kura River to 5–10 mm on the coast of the
Caspian Sea (Absheron Peninsula). The water resources of the Republic of
Azerbaijan are 28.0 km3, of which 7.78 km3 (28%) is formed on the territory of
the republic, and 20.0 km3 comes from adjacent areas, including 1.33 km3 from
abroad.
The outflow of water outside the Republic of Azerbaijan (27.0 km3) is not equal
to the total resources of river runoff due to significant losses of water in the
riverbeds for evaporation. The specific supply of 1 km2 of the republic's area
with local runoff water is 89.8 thousand m3/year, with total water resources –
33
323 thousand m3/year. The specific supply of locally formed water per
inhabitant is 1.29 thousand m3/year, and the total water resources are 4.64
thousand m3/year.
The water resources of the Nakhichevan region amount to 6.08 km3, 0.47 km3 is
formed directly on the territory, and 5.61 km3 comes from adjacent areas,
including 0.38 km3 from abroad. The specific provision of the Nakhichevan
region with locally formed waters is 85.4 thousand m3/km2 and with total water
resources - 1105 thousand m3/km2. The specific provision of one inhabitant with
locally formed waters and general water resources is 1.96 and 25.4 thousand
m3/year, respectively.
In the Nagorno-Karabakh, water resources are equal to 1.07 km3, of which 0.56
km3 are formed on the territory of the region, 0.51 km3 of water comes from
neighboring regions. The specific supply of 1 km2 of area with local runoff
waters here is 127 thousand m3, and with total water resources - 243 thousand
m3.
The basis for the development of agricultural production in Azerbaijan is the
systematic implementation of a set of works aimed at improving the
improvement of irrigated lands and the construction of facilities related to it.
This is an inevitable condition. The implementation of this policy requires new
approaches in the changed economic conditions and low irrigation efficiency in
recent years.
The path of development of melioration and water management in the republic,
depending on the tasks to be solved, can be divided into four stages:
- Structures commissioned before 1966;
- Construction of reclamation and water facilities for the period 1966–1976;
- Land reclamation and water management construction of the period 1976–
1980;
- objects under construction and planned for the period 1980–2020. At each
stage, depending on the conditions and the choice of ways to intensify
34
agricultural production, a program was outlined for the construction of
reservoirs, water intake facilities, main canals, collectors, and on-farm systems.
The first period is characterized by the commissioning of 12 complex-purpose
reservoirs with a total volume of 16.2 km3, large water intake facilities on five
rivers with a water source flow rate of 432 m3/s, nine main canals with a
capacity of 440 m3/s, a length of 845 km, collectors with a flow rate at the
mouth 100 m3/s, 625 km long.
For the period 1966–1976, five reservoirs with a volume of 1.5 km3, water
intake facilities on seven rivers with a flow rate of 220 m3/s, three main canals
with a water flow rate of 66.5 m3/s, 135 km long, 106.4 km.
For the period 1976–1980, 10 reservoirs with a volume of 3.7 km3 were built,
two water intake facilities in the Nakhichevan region with a flow rate of 47 m3/s,
11 main canals with a water flow rate of 390 m3/s, 460 km long, - 250 km) and
Mughan-Salyan (flow - 36.0 m3 / s, length - 90 km) collectors.
Objects built since 1980 are mostly unfinished. These are 30 reservoirs with a
capacity of 7.7 km3, engineering water intake facilities on four rivers with a total
water flow of 44 m3/s, main canals with a flow of 600 m3/s, 641 km long.
Some of the facilities were included in the work program until 2020 and solve
the problems of irrigation, hydropower, land protection from flooding, floods,
mudflows, providing the population and industry with high-quality water.
With the development of water consumption and water use, the requirements for
the water management are increasing and the relationship between its branches
is becoming more complicated, the need to link their interests is determined.
Major water management measures make changes in the natural conditions,
economy and life of the country's population, which often spread over vast
territories.
All this determines the main direction of our reclamation water management
construction - its complexity. The complexity of reclamation water management
construction is the significant material costs and the impact on many sectors of
the national economy.
35
In this regard, in recent years, interest in the problem of joint use of surface and
groundwater resources has increased and related theoretical issues. According to
the data of the Joint Stock Company for Land Reclamation and Water Resources
of the Republic of Azerbaijan, for 1980–2010. The efficiency of the inter-farm
network is 0.88.
The efficiency of the on-farm network, according to the reporting data of the
Joint Stock Company for Melioration and Water Management of the Republic of
Azerbaijan and the design developments of Azgiprovodkhoz, in recent years
amounted to 0.68. Thus, the average efficiency of irrigation systems on an area
of 1215.4 thousand hectares in the republic for 1980-2010 amounted to 0.60.
The explored and approved operational reserves of groundwater throughout the
country are 117.67 m3/s, including fresh groundwater - 105.86 m3/year, low-
mineralized with a dry residue of 1 to 3 g/l - 11.81 m3 / year.
For permanent use for the purpose of irrigating lands in the republic,
groundwater reserves, mainly in agricultural areas, amount to 2432 million m3 /
year.
Groundwater resources are understood as their operational resources, i.e. the
amount of groundwater that can be obtained by technically rational water intake
facilities under a given withdrawal mode during the entire estimated period of
operation. The assessment of operational groundwater resources for irrigation
purposes within the framework of joint use systems is associated with the need
to take into account a number of specific features. First, this concerns the
selection regime associated with the probabilistic nature of surface runoff and
water consumption, as well as their intra-annual distribution. Secondly, this is
due to the need to take into account the distribution of recharge and discharge of
groundwater (infiltration of irrigation water in the fields and evapotranspiration).
The joint use of surface and ground waters for irrigation makes it possible to
link the water management balance of the area with insufficient surface water
resources, therefore, the solution of the problems of joint use is associated with
the specifics of not only hydrogeological, but also water management character.
36
Today, an important condition for ensuring effective management decisions is
the availability of not only the completeness of information on the state and use
of water resources, but also the promptness of access to it, as well as the
possibility of conducting an analysis based on current data.
The lack of information for making decisions about the need and possibility of
restoring water bodies is a serious problem in solving such problems. It is
caused not so much by the inaccessibility of the necessary information about
methods and technologies of restoration, but by the impossibility of obtaining it
in a timely manner, the difficulties that arise when comparing large volumes of
heterogeneous data for a particular water body. The main link in the water
economy is water resources, which consist of reserves of surface and ground
waters, and water facilities. All its functions related to the extraction,
processing, reproduction, regulation, storage, use and disposal of used water, as
well as the prevention of the harmful effects of water within river basins, are
closely interconnected.
Water resources and their use are characterized by a number of features that
make it necessary to manage them as a whole. The river flow, the use of which
is planned, is a variable value, subject to fluctuations during the year and from
year to year. In addition, it is unevenly distributed over the territory. The
discrepancy between the regimes of runoff and water consumption requires
special measures to ensure a uniform supply of water for a well-functioning
economic mechanism and the needs of society.
Another feature is that the rivers, which serve as the main source of water
supply, are also used as a recipient of wastewater. Because of this, the
reproduction and quality of water resources are closely related to the mode of
their consumption. A feature of water resources is the complex nature of their
use with a significant differentiation of consumer effects.
The following table illustrates the key indicators and use of water resources in
the means of millions of cubic meters. The water used from the natural sources
in total has increased during this period from 11110 to 13227 million cubic
37
meters. The major part of water consumption was used by irrigation and
agricultural supply, whereas in other spheres it declined sharply.
Table 2: Key indicators characterizing the protection and use of water
resources (million cubic meters)
2000
2010
2015
2016
2017
2018
2019
2020
Water from natural
sources – total
11110
11566
12285
12504
12781
12847
13227
12961
Per capita, m3
1397
1295
1289
1297
1313
1308
1335
1300
Water consumption
– total
6588
7715
8567
8824
9154
9205
9472
9693
From that:
For domestic
purposes
449
405
323
308
291
306
312
319
For production needs
2316
1742
2117
2108
2224
2111
2070
2073
For drinking water
82
54
46
43
31
44
42
45
Irrigation and
agricultural supply
3819
5497
6057
6342
6570
6722
7038
7252
Volume of water
used periodically
and consistently
1875
1787
2441
2346
2398
2345
2358
2243
As a percentage of
total water
consumption for
production needs
45
51
54
53
52
53
53
52
Water lost during
transportation
3053
3851
3718
3680
3627
3642
3755
3268
Disposal of
wastewater
4106
6037
5575
5673
5453
5147
4863
4759
Untreated from them
171
164
305
319
326
272
218
225
Source: According to the Amelioration and Water Resources Open Joint-Stock Company of
Azerbaijan.
38
The current situation of the usage of water and soil resources in the
economic regions Ganja-Dashkasan and Gazakh-Tovuz of Azerbaijan
A survey was conducted among farmers in the western region, in particular in
the Ganja-Dashkasan and Gazakh-Tovuz economic regions. All regions
(Samukh, Shamkir, Tovuz, Gazakh, Agstafa, Goygol, Goranboy, Dashkasan and
Gadabay) located in the above economic zones took an active part. In total, 75
farmers were involved in this issue and they, by choosing the appropriate forms,
contributed to the summing up related to the rational use of land and water
resources. Including statistics, the following information was obtained as a
result:
Including summary information, the following should be taken into account:
Among the farmers, 78.7% of the participants were men, while women
accounted for 21.3%. The majority of farmers in these two economic zones are
people whose age is 35-54 (44%) and 55-64 (30.7%). Sunflower, clover,
sorghum, tomato, potato, persimmon and other agricultural crops are grown in
the region in accordance with specialization and climatic conditions. Most of all,
people are concentrated on growing barley and wheat.
Taking into account the problems of land resources, the situation was clarified,
primarily related to the fact that, in the opinion of people, the land resources
they have are effectively used. In response, 56% answered yes, where 44% still
think no. Answering the question "Which of the following do you consider the
most when growing your product?", rural residents think about food security
(40%) and economic benefits (34.7%). Unfortunately, few people are interested
in protecting the environment (16%). The next thing that was interesting to find
out was the following question: "Do you grow crops in accordance with the soil
structure in the area where you farm?" On this occasion approximately 63% of
the farmers answered yes; 27% no; and the rest hesitantly. Another important
aspect was related to crop rotation or leaving the land alone for a certain period.
39
Source: Compiled by the author based on a survey (16.03.2022)
Source: Compiled by the author based on a survey (16.03.2022)
Here, approximately 2/3 of the population thinks that there is no need in their
territories; on the other hand, 1/3 part takes this question differently and in their
opinion it is very important and most of them do it every 1-2 years. Last but not
least, this is the opportunity to use intensive technologies and advanced
machinery, where farmers face financial problems and cannot afford to purchase
it. Approximately 72% are not capable of this. Only 28% can afford all this,
mainly the population of Shamkir, where people grow tomatoes.
Revealing the water potential of the region, the survey showed that during the
use of water, 65.3% of farmers have problems with water. Only the population
Diagram 1. Is the use of intensive technologies available
to you?
Yes
No
Diagram 2. Do you use crop rotation or leave the land to
regenerate for a certain amount of time?
Yes
No
40
of Goygol, Dashkasan and Gadabay districts face this problem less compared to
other districts. Furrow irrigation with a pump or water from an irrigation canal
accounts for approximately 70% of farmers. Approximately 25% use drip and/or
spray irrigation on their plots; a small part of the underground irrigation. During
irrigation, people mainly complain about the lack of water and the water
monopoly of large farmers, respectively 36% and 18.7%. There are some
farmers who claim that they have no problems. Taking into account the above
statistics, you can see the existing problems.
Source: Compiled by the author based on a survey (16.03.2022)
Source: Compiled by the author based on a survey (16.03.2022)
Diagram 3. Do you face difficulties in using water?
Yes
No
I have no problem
There is not enough water
There is a monopoly on water, ie large
farmers do not allow us to have access to…
Given the seasonal issues, we face
problems as the river level drops
Proper equipment not installed (between
lines)
0% 5% 10% 15% 20% 25% 30% 35% 40%
Diagram 4. What difficulties do you face during irrigation?
41
Chapter III SOLUTIONS TO INCREASE THE ECONOMIC
EFFICIENCY OF USING NATURAL RESOURCES IN AGRICULTURE
3.1. Experience of effective use of land and water resources in developed
countries
The entire experience of the functioning of the land market in developed
countries is based on the fundamental provisions of the legislation of the
respective states.
The land market, including lease, inheritance, etc., is not a self-sufficient
economic and legal category. It serves as an instrument of appropriate land
policy for the use of land resources. To some extent, it reflects both the degree
of land availability of countries and national traditions with more or less
economic liberalization.
State regulation is an essential factor in the land use system and in the land
market as a whole. The change in the very concept of property from unlimited to
limited, with significant social responsibility and observance of the goals of
national policy, has led to a developed state system for regulating the land
market, buying and selling, renting, inheritance rights and all forms of transfer
of land ownership. An important area of state regulation is the turnover of
agricultural land. In addition to purely administrative measures, economic levers
also play a significant role here, in particular taxation with land tax
differentiation depending on land use. In general, this creates a very complex
conglomerate of the modern land market with a combination of purely market
forces and multilateral state regulation. The purchase and lease of land are the
most common ways of transferring land ownership and land use rights. They
constitute the most important elements of the land market and, as such, are
subject to civil law in many, if not most, cases of state regulation, the latter
being determined both by national specifics and by more general factors.
Taking into account the differences in land legislation in many countries, it is
more expedient to consider the law enforcement practice for each individual
country.
42
If, from this point of view, we try to generalize the experience of developed
countries, then we can present in a schematic form the goals and instruments of
land policy and the restrictions that are imposed on the land market.
Table 3 - Goals of the state land policy
The main objectives of state regulation of
the land market
Countries
Regulation of the purchase and lease of
land
Denmark, Germany, Japan
Prevention of excessive concentration of
land ownership
Denmark, Germany, New Zealand,
Switzerland, Spain, France
Prevention of excessive fragmentation of
land plots
Denmark, Germany, Ireland, Italy, Japan,
Portugal, Spain, Switzerland, Netherlands,
Norway
Retention of the population in places of
residence
Norway
Source: https://comtrade.un.org/
Thus, most Western countries exercise fairly tight control over the land market.
At the same time, there are countries with a much more liberal land market
regime in terms of trade and land lease, although even there there are restrictions
on the withdrawal of agricultural land from circulation, taxation, inheritance
rights and other factors. Both national traditions and the availability of land
resources affect here. These countries primarily include the USA, Australia,
Canada; somewhat less control in the UK, Belgium and Greece. However, even
here the state reserves the right to intervene, for example, from an environmental
point of view. For example, in Australia, where most land is publicly owned,
permits to use or lease land are subject to farmers' compliance with relevant land
use regulations, such as erosion control and desertification prevention.
43
Of particular importance is the legislation on rent. In general, we can state the
desire of many states to extend the lease terms and stabilize rental rates. In
general, these provisions can be summarized in Table 3.
This table gives an overview of the variety of lease conditions, with significant
differences from more liberal (as in the US) to more regulated (as in most of
Europe) legislation and practice.
In addition to the United States, other countries with a liberal rental market
practice include Australia, Canada and New Zealand.
In Western Europe, in most cases, there is a minimum rental period. Only in
such countries as Norway, Denmark and from the developed non-European
countries - Japan, a maximum lease term is set, and a short term is set in Ireland,
i.e., in countries where the lease itself does not play a significant role. In
Denmark, the maximum lease term is 30 years. The legislation of this country
does not allow further extension of the lease line and encourages the tenant to
buy the land and become its owner. In other countries, the lease environment
can be extended beyond the established period with the creation of a system of
long-term leases.
Table 4 - State regulation of rental relations:
Country
Duration and regulation of rental
contracts
USA
The term depends on the contract; long-
term contracts tend to predominate,
rental rates are determined by the
market
United Kingdom
The term depends on the contract.
There are both long-term and short-
term leases. The level of payment is
determined by arbitration
44
Iceland
The term depends on the contract. The
amount of the rent is determined by law
Ireland
Lease term - at least 3 years. The
amount of the rent is determined by the
market
Source: https://comtrade.un.org/
There are also different practices in setting the size of the rent. In Denmark,
Ireland, Greece, Luxembourg and Norway, the landowner and the tenant
independently agree on the level of rent payments. In other states, where rent
plays a much larger role, there is legislation to regulate rent.
In the UK, both parties are free to determine the amount of the rent, but then it
goes to the review and approval of the local authorities, which are guided by the
relevant standards governing the amount of such payment.
The law also provides for regulation or administrative approval in Ireland and in
France. The authorities can control rents by setting maximum or standard rents.
On this basis, actual lease contracts are prepared. This practice exists in the
Netherlands, Spain, Belgium, Portugal and Japan. In this case, the rent is
calculated in cash based on the potential harvest and prices for past years.
Thus, the practice of rent regulation is determined on the basis of the specifics of
each country, and it is difficult to find a general pattern here, although there is a
difference between the more liberal overseas and the more regulated European
and Japanese.
Inheritance is one form of land ownership change and as such is one of the
elements of the land market.
By itself, the legal procedure of inheritance has several millennia. Inheritance is
one of the most common legal acts, and therefore the traditions of individual
countries, legal schools, economic feasibility, and customs and, to a large extent,
state policy have left their mark on the principles of inheritance. At the same
time, these principles themselves are undergoing changes in accordance with the
45
realities of today. In general, there is no single theoretical legal basis for the
institution of inheritance, a single legal, economic and administrative practice
and the inheritance system itself can be divided into several groups, depending
on the origin of a particular legal system. They have different theoretical
backgrounds, different practical applications, and at the same time, they are
influenced by government policies aimed at combating land fragmentation,
promoting the concentration of agricultural production and maintaining viable
farms. It can be quite definitely concluded that legal theories and legal practice
are under serious influence from the state, focused primarily on specific
economic goals. In general, the legal principles and systems of inheritance law,
within the framework of general civil law, can be divided into three main
groups:
• Group of countries with German civil law, oriented towards the German
civil code and German legal practice.
These countries include Germany itself, Austria, Switzerland and Greece. The
legal systems of the Scandinavian countries (Sweden, Norway, Denmark and
Finland) are close to them both theoretically and practically.
• The second group of countries includes those states where, on the basis of
Roman law, civil law was formed, which found its expression in the Civil Code
of Napoleon. Undoubtedly, the adoption of this code in 1804 had a great impact
on both legal theory and practice, primarily in the countries of Romanesque
culture, which historically have always identified themselves with Roman
culture, including Roman law. This group of countries includes, first of all,
France itself, as well as Belgium, Luxembourg, the Netherlands, Italy, Spain and
Portugal. Once again, I would like to emphasize that the basis of their legal
system in the field of civil law, including the law of inheritance, is the
Napoleonic Civil Code, but, as will be shown below, significant adjustments had
to be made to these legal principles, and especially to their enforcement. So that
they meet both the spirit and the needs of the times.
46
• The third group of countries includes, first of all, the states of the Anglo-
Saxon legal culture, in many respects different from continental Europe. Anglo-
Saxon legal theory and practice, first of all, is based on customary law, separate
laws, on the law of precedent, it proceeds from specific facts, without trying to
clothe them in the finished form of codes. At the same time, this legal system is
focused more on the freedom of the individual, his inalienable right, and is
distinguished by significantly less state interference in the field of civil law, in
particular family law, relations, including in the field of inheritance. This group
of countries includes, first of all, the UK itself, the USA, Ireland, Canada,
Australia, and New Zealand.
Japan stands somewhat apart, which largely copied many of the provisions of
the countries of continental Europe in its Civil Code. At the same time, here in
civil law and in legal practice, the Japanese national character also affected - to
strive to do everything by finding a common opinion in resolving the inheritance
case at the family council without resorting to the authorities. This showed the
differences between the Japanese approach to legal issues and the American one,
where everything is sought to be resolved in court. Therefore, now more than
half of all lawyers in the world live in the United States, and in Japan, based on
the corresponding population groups, the smallest number of lawyers among
other developed countries.
Analyzing the modern theoretical attitudes and the actual legal practice of these
three main legal systems, one can point out their basic principles and
differences.
In the first group of countries (German law), the principle is widespread in land
inheritance law: the testator does not have the right to arbitrarily bequeath his
land property, and, as a rule, it should pass only to one of the heirs, and all the
rest should receive appropriate monetary or property compensation.
This principle is especially clearly seen in the legislation of the northern,
Protestant lands of Germany. Here, after the established fact of the death of the
testator, the land, as well as real estate, goes only to one of the heirs, usually
47
either the eldest in the family, or who is most connected with housekeeping. In
case of disputes, such heir is determined by the court. The law requires that this
person has the appropriate qualifications, work experience and the ability to
effectively manage the household.
In other lands of Germany, in the Catholic south, where other traditions prevail,
the Civil Code allows for the division of land between all heirs. However, the
same code allows leaving the land to only one heir, with the condition of
payment of compensation to the rest of the co-heirs. In general, even based on
the general principles of German law, in each of the countries of this group, a
specific policy is implemented and special legal norms are applied to reflect
both local realities and agricultural and economic policy in general.
In Sweden, with its traditionally high level of government regulation, when
receiving an inheritance, permission from the authorities is required to enter the
farm in order to preserve its integrity. If there is a problem with the allocation of
one of the sites, then permission is also required for this. The main idea in this
case is the desire to avoid fragmentation of the economy and maintain a viable
size of enterprises that would provide a reasonable level of profitability and
would allow for a proper income. If the authorities do not give consent to the
division of farms, then the heir is obliged to sell it entirely or lease it. The latter
is a rather particular solution to the problem, which explains the high proportion
of leased land in Sweden.
In the group of countries with the dominance of Roman law, the Civil Code of
Napoleon is the starting point. It reflects both the principles of Roman law and
the historical era when it was created. The main thing in it is the equality of
rights, which also applies to inheritance. This means that all heirs have equal
rights to receive an inheritance. The adoption of this principle had serious
consequences in the form of a consistent fragmentation of land allotments. Such
a fragmentation of farms was in clear contradiction with the need to consolidate
land plots and concentrate farms in the transition to modern mechanized
production.
48
Therefore, each of the countries of this group of states had to amend the Civil
Code or adopt special laws in order to at least somehow alleviate this problem.
In France, the principle of "preferential heir" was adopted. Based on this
principle, the most qualified candidate is selected from among the heirs by the
local court. The entire household is transferred to him, and he must reimburse
the rest of the co-heirs for their share in the inheritance within 10 years.
In the third group of countries where Anglo-Saxon law prevails, the question of
inheritance is fundamentally different. According to the principles of this law,
the testator is not bound by any obligation to transfer his land. He can leave it to
anyone, most often only to one of the heirs (which has become a historical
tradition in England). This principle has both positive and negative implications.
Positive ones are, as a rule, the preservation of the integrity of land ownership,
and negative ones are the arbitrariness of the testator and the uncertainty of the
rights of other co-heirs.
In Japan, as already mentioned, its own legal culture has developed, although
based on the continental European one; it has its own specific features. The
inheritance of land is determined by the joint decision of all heirs, free to choose
the method of division of the inheritance, but, as a rule, the integrity of the
agricultural enterprise is not called into question, especially given the extremely
small land holdings in the country.
In general, if we summarize the issues related to the theories and practice of
transferring land by inheritance, we can say that there are no common principles,
a single theory and single law enforcement.
Historically, different approaches to inheritance law have developed, and they
persist, but the need to concentrate or, in any case, prevent the fragmentation of
farms requires the application of such legislation and enforcement practices that
would allow maintaining relatively viable and profitable farms, even after a
change of generations of owners.
There are two trends in the field of land ownership rights for foreigners - on the
one hand, the desire to protect the ownership of land from its possible purchase
49
by foreign citizens or non-residents, on the other hand, the creation of legal
systems, primarily in the European Union, where, on the basis of reciprocity
non-residents, but citizens of the countries of the European Union, are equal in
rights to the citizens of this state, based on the general principle of free
movement of capital and labor.
The real situation is determined by the degree of economic development of the
state, the system of its financial realities. One can summarize in Table 4 such
restrictive approaches in different countries.
Table 5 - Approaches to restricting land acquisition by foreigners
The level of implementation of the restriction on
the purchase of land by foreigners
Countries
At the national level
Ireland, Japan, Mexico,
New Zealand
At the regional level
Australia, Canada, USA
Source: https://comtrade.un.org/
A number of other countries also practice restrictions on the ability of foreigners
to purchase land. For example, such restrictions apply in Austria, the Czech
Republic, Iceland and Turkey. In the European Union, privileges for the
purchase of land by foreigners apply only to citizens of the countries of this
international organization, and restrictions are imposed on all others.
The very nature of such restrictions and the forms of problem solving vary from
country to country. For example, in New Zealand, the right to purchase or lease
more than 2 hectares of land is decided by the land protection tribunal, and the
decision depends on each specific case, taking into account the possibility of
introducing new technologies, large investments, business competence, as well
as the availability of free land.
50
In Australia, these restrictions are applied mainly in the Western part of the
continent, to ensure that the Australians control over much of the still underused
land.
In Canada, this regulation is more stringent, with the aim of limiting or
preventing foreign ownership of land. Legislation on this issue is carried out at
the provincial level, and in some cases this applies not only to foreigners, but
also to non-residents of the given province. Only in Newfoundland and New
Brunswick, where there is almost no agriculture, is there free purchase of
farmland.
In the countries of the European Union, there is a preferential internal regime for
all citizens of the countries of the Union and general rules for external
investment for citizens of other countries have been adopted at the Union level.
However, even within the Union, some countries have retained restrictions even
for citizens of other member states of this international organization. Thus, in
Ireland, where local traditions of fighting for land with English landlords are
strong, a regime has been created that severely limits the ability of foreigners to
buy land.
In France, special permission is required in two cases - if the transaction exceeds
3.750 million euros (data as of April 2014) or if it is a question of buying
vineyards, which are traditionally considered an important part of the country's
national wealth.
In Japan, agriculture, as well as in many other sectors of the economy, has
traditionally pursued a policy of restricting foreign investment. Foreign
investments are prohibited in agriculture, not only in land, but in agricultural
production as a whole. The same applies to forestry and fisheries. One can
especially look at the situation in this regard in the United States, where there is
a very diverse experience in granting rights to purchase land or restricting these
rights to foreigners.
In 1978, the Foreign Investment in Agriculture Act was adopted. This federal act
does not prohibit foreigners from acquiring farmland in the United States, but in
51
each individual case they must report this to the US Secretary of Agriculture.
The same applies to forest lands. Mostly foreign owners are Canadians and
Europeans.
The actual restriction of the rights of foreigners to purchase land is carried out at
the state level. Currently, 28 states have laws restricting the rights of foreigners
to purchase agricultural land. The same applies to other land ownership (in
particular, there are restrictions on the acquisition of urban, forest land and land
occupied by freshwater sources). A number of states limit the amount of land
that can be sold to foreigners. In some states, even citizens of friendly countries
are not allowed to buy agricultural land, but an exception is made when buying
land for mining or research work. Many states have restrictions on citizens of
hostile countries either selling public land or converting land from agricultural
to other uses.
In general, a total of 17 states, mostly agricultural, practice restrictions on the
sale of agricultural land to foreigners.
In general, these restrictions primarily exist in the main agricultural states,
preventing or making it difficult for foreigners to acquire agricultural land.
Thus, the management system of state (municipal) land resources in foreign
countries provides for the achievement of several goals:
• Effective use of state (municipal) lands;
• Optimization of the structure of budget revenues at the expense of income
from land ownership;
• Creation of a civilized real estate market;
• Ensuring guarantees of property rights to real estate objects.
Using the experience of maintaining a land cadaster in countries with a
developed market economy can provide significant assistance in the
development and establishment of land and property relations in the Azerbaijan
Republic in the implementation of economic reforms.
52
Foreign experience in Agriculture on the use of water resources
Irrigated land is widely recognized around the world as the most important
national asset. Especially in developed countries, much attention is paid to the
efficient use of irrigated lands and the prevention of their withdrawal from
agriculture. Due to our limited capacity in this study, we can look at the
importance of foreign experience in some countries.
Turkey's experience in the use of water resources in agriculture is of particular
importance. In particular, Turkey is one of the countries with a population of
over 65 million (rural population over 25 million), and it cultivates 19 million
hectares of arable land, of which 22.6% is irrigated land.
The country has 0.32 hectares of arable land per capita, with an average annual
rainfall of 650-700 mm, but in some areas it reaches 400-2500 mm (4,000 cubic
meters to 25,000 cubic meters per hectare). Although the average annual water
resources are 180-190 billion cubic meters, groundwater is 10-15 billion cubic
meters, and the total water resources are about 200 billion cubic meters, but only
about 30-35 billion cubic meters (15 percent) is used. Of these, wastewater
resources are 25-26 billion m3, and groundwater resources - 5-6 billion m3.
Turkey's climate provides great opportunities for agriculture (60% of its borders
are covered by the freezing Black, Marmara, Aegean and Mediterranean seas),
which allows the cultivation of all types of agricultural products. However, the
agricultural sector is underdeveloped, for example, the average yield is 21
centners per year, and the average yield is 18 kg per capita.
Planning, design, construction, flood control, irrigation of agricultural fields and
delivery of water to cities and villages is carried out by the State Water
Administration (SWA). At the same time, the Prime Minister personally
supervises and controls the work that needs to be done and what needs to be
done.
Turkey has developed a mechanism for paying for water used for irrigating
crops, taking into account local conditions. 55.8% of the irrigated land was
53
previously irrigated, and 44.2% is newly developed land, and there is no charge
for irrigating old irrigated land.
It should be noted that irrigation systems for field irrigation and water
distribution, as well as water use structures, have existed for a long time.
Separate payment mechanisms for water resources used on newly developed
land were introduced, and this mechanism was considered as a criterion for two
types of costs:
• Including expenses for the operation of water facilities - the operating tax
is paid at the expense of irrigated arable land;
• By introducing a tax to cover part of the capital investment in the
construction of land reclamation facilities. This tax is also calculated by the way
of consideration of the irrigated area.
State expenditures on the water management system are mainly related to the
process of construction of hydraulic structures. The State Water Administration
(SWA) has 26 hydroelectric power plants (HPPs) with all hydroelectric power
plants, reservoirs and, above all, operates in irrigation mode, giving priority to
the irrigation of crops.
There are currently 152 reservoirs in Turkey and more than 50 reservoirs are
under construction. It is noteworthy that more than 40% of total public spending
on water resources management is covered by the sale of hydropower resources.
Irrigated land is of great importance in the country, and the acquisition of such
land for housing or other purposes is strictly controlled.
The population of China is more than 1.3 billion people; the total land area is
138 million hectares, which is 0.11 hectares per capita. The sown area is 100
million hectares, of which 50 million hectares are irrigated lands. The average
annual rainfall is 1200 mm, or about 12000 cubic meters per hectare. An
average of 400 billion cubic meters of water is used here for irrigation, an
average of 7.1 thousand cubic meters per hectare. State reservoirs and more than
5,000 water facilities serve to support the water management system. China's
economic reform, which began in the 1980s, also attaches great importance to
54
the efficient use of water resources during large-scale agricultural work.
Payments for water used in agriculture are determined by regions and the
amount of water available.
In China, the government spends about 50 billion Yuan a year on irrigation, or
about $200 per hectare. These funds are covered from the state budget - 75%,
and water users - 25%.
One of the largest water management systems in China is the Yellow River
complex. The total length of the complex is 252 km, including 460 water
features and 13 dukes. Here the water rises up to 40 meters above the river.
Today, the Ministry of Water Resources of China has extensive water use rights,
and the country has established a separate water protection system that controls
water use.
The population of the State of Israel is more than 5.0 million people, and the
cultivated area is 435,000 ha, of which the irrigated area is 220,000 ha, and the
area per capita is 0.09 ha. In addition to the lack of land and water, the country's
agriculture sector lacks labor. Attempts will be made to address such socio-
economic and climate problems through increased mechanization.
To maximize the available moisture in the soil, the soil is carefully cultivated
and water is retained in the soil. An additional 500 kg of wheat can be obtained
from the area in accordance with such methods. Israel currently exports over
$60 million worth of agricultural machinery to more than 100 countries.
In Israel, the average annual rainfall is 1000 mm or more, while in the desert of
the country it is 300-500 mm. All water resources (sewerage, groundwater and
surface water) in the Israeli region are administered by the Water Committee,
which is under the constant control of the State Water Council at the national
level, and its use is limited and restricts the use of water resources by all
organizations and enterprises.
Water supply agreements are concluded at the beginning of the year, and the
water limit is clearly defined in May. For example, the amount of precipitation
and commonly used water resources of the Hydro meteorological Service are
55
allocated based on the availability of water and water prices for the population
and sectors by the competent authorities. It can vary from $1.0 per m3 of
domestic water to about $0.15 per m3 of irrigation water. Water costs for water
management organizations (Mekhorat) are US$0.30 per cubic meter supplied by
the government to the agricultural sector to cover water costs, although the
average cost is US$0.35–0.40; $0.80 in assistance for the same amount of water
supplied to industries.
In this country, the control of water consumption is very strict, and if consumers
use water over the limit, they will be charged 10 times more per cubic meter.
Consumers also pay a fine of $0.50 per cubic meter for the discharge of water
resources, as well as a fine for consumers who cause pollution of ground and
surface water. This is due to the fact that the money received from wastewater
will be used to develop water management. These measures are an important
factor in ensuring efficient water use and reducing water consumption.
It is worth noting that activities related to the reuse of water resources lead to an
increase in the concentration of salt in arable land, water bodies and
underground sediments in the country and an increase in the proportion of saline
soils, which requires additional funds and costs. Due to the scarcity of water, the
State of Israel is known worldwide for its low water consumption technologies.
In some parts of the world, an analysis of the amount of water used per hectare
to irrigate crops shows that the Israeli style prevails. Including California, 12-14
thousand m3; 19-22 thousand m3 in India; 18-20 thousand m3 in Pakistan, 14-20
thousand m3 in Turkey, 15-17 thousand m3 in China, 15-19 thousand m3 in
Turkmenistan, 25-35 thousand m3 in Kazakhstan, 20-25 thousand m3 in irrigated
Israel (with drip irrigation).
3.2. Ways to improve the efficiency of the use of natural resource potential
in agriculture
Socio-economic dependence on land and water resources
The issue of increasing the efficiency of the use of land resources has always
been relevant, since land is the basis of agricultural production. Land resources
56
for the use of which, a significant part of the volume of food and the fund of
consumption goods is formed, is the primary factor of production, and occupy
the largest share in the structure of the resource potential of agricultural
enterprises. Therefore, an increase in the efficiency of use of land resources will
contribute to an increase in the efficiency of the use of the entire resource
potential.
As agriculture becomes more productive and production per unit of land and per
capita grows, higher incomes, reductions in poverty and increased food security
can be expected, leading to reinvestment in rural economies. In general, more
intensive irrigated agriculture has often emerged where production volatility in
rain fed agriculture has been deemed intolerable. However, intensive farming
does not always lead to increased employment in rural areas, and in many cases,
governments with limited budgets are forced to choose the most suitable
farming method. For example, public investment in support of rain fed
agriculture can lead to high distributional outcomes but lower overall growth
than investment in irrigated agriculture, where growth can be higher and income
recipients are lower. Despite these considerations, the global distribution of
people suffering from malnutrition and food insecurity, including those in
countries in protracted crisis, remains uneven and cannot always be linked to
agricultural productivity. The main factor remains the pressure from population
growth in resource-poor countries.
Increasing the productivity of land resources
Growth in crop volumes plays a significant role in reducing poverty. It is
estimated that each percentage increase in yields results in a 0.6–1.2% decrease
in the number of absolutely poor that is, the number of households that cannot
meet basic survival needs. However, these data also indicate that if the change in
farming systems in developing countries is not stimulated, then cereal yields,
while maintaining traditional management, will stop at less than 2 t / ha. Some
African countries harvest 20% of the possible harvest. In contrast, other
countries have increased yields by several percentage points in recent years (e.g.
57
countries in Southern Africa). Trends over the five-year period from 2000 to
2005 confirm that productivity gains are possible in both more developed
countries (4% increase) and less developed countries (3% increase), leading to a
narrowing gap in productivity. The gap between current and potential yields is
greatest in sub-Saharan Africa, where farms with few inputs can double grain
yields. Thus, there is an opportunity to narrow the yield gap for some of the
world's poorest regions, while developing countries could double the average
grain yield from 2.9 to 5.7 t / ha.
Rapid increases in rainfed yields in some areas indicate that improvements can
be made if conditions are favorable on site. These conditions include
institutional reform that will ensure the introduction of advanced technologies,
efficient markets for final products and goods needed in agricultural production,
road infrastructure, mechanization, more rational use of fertilizers and the use of
high-yielding varieties, and improved soil moisture management. These are the
conditions that have ensured the rapid growth of rainfed agriculture productivity
in Asia and the developed countries. However, while all these conditions are
well known and proven to be valuable, smallholder rainfed farming yields in
developing countries have remained stagnant despite years of efforts to improve
productivity, especially in sub-African countries. Rainfed agriculture in East
Africa has remained at 16% of its potential for many years.
One of the main challenges for rainfed agriculture is the implementation of
affordable technical solutions to improve management without increasing risks.
Rainfed farming systems in developing countries are often characterized by low
productivity due to insufficient and variable water availability, as well as
environmental and soil problems, including soil salinization, temperature
extremes and lack of nutrients. The available technological solutions are
specifically low-yielding: the innovations of the Green Revolution are highly
dependent on the availability of water. In addition, improvements to improve the
productivity of rainfed farming tend to increase the level of risk. And the risks
58
inherent in rainfed agriculture are compounded by the risks associated with
climate variability.
In some regions, these limitations have been overcome. In China, investments in
combined land and water management have generated good returns with
manageable risk. The 1.5 M ha watershed restoration project on the Loess
Plateau has demonstrated that improved land and water management can be
profitable. In other regions of the world (Australia, Argentina, Sub-Saharan
Africa, Kazakhstan and Canada) several rainwater management technologies
and conservation farming techniques have been introduced with some success,
and there is growing evidence that farmers are adopting these innovations. One
of the problems is that many innovations pay off the investment only after some
time.
The main problems of rainfed agriculture are the low and poor quality of
nutrients in soils and poor soil structure. The lowest average rainfed agricultural
productivity is found in sub-Saharan Africa, especially in small farms, due to
low soil fertility, exacerbated by deteriorating nutrient quality: cereal yields are
often below 1 t / ha. Fertilizer-based solutions are often unavailable and too
risky in low-yielding rainfed farming systems. In these cases, sustainable land
and water management technologies, including conservation agriculture, can
help to restore and improve fertility through integrated soil fertility management
(Pretty et al., 2011).
The direct and indirect benefits of improved soil management in agricultural
systems can be measured in terms of economics, environmental protection and
food security:
• Economic benefits: improved soil management lowers the cost of inputs to
agricultural production by improving resource efficiency (especially nutrient
degradation and cycling, nitrogen fixation, water collection and movement). The
need for fertilizer can be reduced if the nutrient cycle becomes more efficient
and fewer nutrients are leached out of the root zone. The need for pesticides can
be reduced where there are a variety of natural enemies of crop pests. As soil
59
quality improves, the availability of water and nutrients to plants improves. It is
estimated that nutrient cycling provides the largest contribution (51%) to the
total value (US $ 33 trillion) of all ―ecosystem services‖ (including cultural
services, waste management, disaster recovery, water supply, food production,
gas regulation and water) provided annually (Constanza et al., 1997).
• Environmental protection: soil organisms filter and detoxify chemicals and
absorb excess nutrients that, if released into groundwater or surface water,
become pollutants. Managing soil organisms helps prevent pollution and land
degradation, especially by minimizing the use of chemicals and maintaining or
improving soil structure and increasing cation exchange capacity (CEC).
Excessive declines in soil biodiversity, especially the loss of key species or
species with unique functions (for example, through overuse of chemicals,
habitat loss, or internal factors); can have catastrophic environmental impacts
leading to the loss of agricultural productivity. The totality of soil organisms
also partially determines the stability of the soil and its ability to restore its
previous state.
• Food security: Better soil management can increase crop volume and quality,
especially through pest and disease control, and improve plant growth. Soil
biodiversity determines the efficiency of resource use as well as the
sustainability and stability of agro ecological systems.
There are the following ways to improve land efficiency:
- Selective excavation of rocks suitable for biological reclamation, their
transportation, storage or direct use for reclamation of disturbed lands;
- Placement of unusable and unsuitable rocks in the lower part of the dumps;
- Compact lying of overburden into dumps to reduce the volume of mining and
planning works;
- flattening of the slopes of the dumps and sides of the residual openings;
- Formation of optimal in terms of geometric parameters, non-burning and stable
dumps;
60
- Optimal withdrawal and minimum terms of land use in the technological
process;
- Reduction of negative impact on the environment, preservation of favorable
ecological conditions for plants and animals in the area of opencast mining.
Water efficiency and ways of its enhancement
Improving the efficiency of on-farm water use (useful consumptive water
consumption divided by evapotranspiration as part of the water supplied)
depends on farmers' skills in on-farm water management. Measures to improve
on-farm water use include improving the ability of farmers to calculate the time
and volume of water for irrigating crops and investing in on-farm irrigation
technologies that improve water control and reduce losses. Pipeline distribution
systems and precision root irrigation (e.g. drip or bubbler) can improve control.
These technologies can also reduce wasted water consumption by reducing
transport losses, seepage and waste evaporation. Efficiency can be increased
even more by controlling the microclimate in which the plants are grown, as
when using greenhouses.
Let's look at this issue from the perspective of water conservation and increasing
crop growth:
Water conservation
Reduce transport losses by lining ducts or preferably by using closed
pipelines.
Reduce direct evaporation during watering by avoiding watering at noon.
Minimize interception of foliage under the plant rather than spraying from
above.
Reduce runoff and seepage losses due to over-irrigation.
Reduce bare soil evaporation by mulching and keeping row spacing’s dry.
Reduce weed transpiration by keeping row spacing’s dry and applying
weed control measures where needed.
Increased crop growth
Choose the most suitable and demanded cultures for the region.
61
Use optimal timing for planting and harvesting.
Use optimal tillage (avoid over tillage).
Use appropriate insect, pest and disease control products.
Whenever possible, apply fertilizers and green manures and fertilize them
efficiently (preferably by introducing the necessary nutrients into the irrigation
water).
Practice soil conservation for long term sustainability.
Avoid progressive salinization by monitoring water table rise and early signs of
salt accumulation, and by using appropriate drainage.
Water at high frequency and in the exact amounts needed to prevent water
scarcity, taking into account weather conditions and plant growth stage.
Drip irrigation is the most efficient delivery system for water and nutrients for
growing crops. It delivers water and nutrients directly to the plant's root zone in
the right amount and at the right time, so every plant gets exactly what it needs,
when it needs it for optimal growth. With drip irrigation, farmers can achieve
higher yields while saving water, as well as fertilizer, energy and even crop
protection.
Water and nutrients are delivered throughout the field in pipes called "droppers,"
which include smaller units known as "droppers." Each dropper emits droplets
containing water and fertilizer, which results in an even application of water and
nutrients directly to the root zone of each plant throughout the field.
The introduction of a drip irrigation system 50 years ago increased yields by
50% while saving water by 40%. Hundreds of scientists have worked on this
development, and it has changed agriculture, making it possible to grow crops
even in the desert.
By 2050, our planet will have 10 billion people and 20% less arable land per
person to grow enough calories. Include increasing water scarcity and it is clear
why we need a way to improve agricultural productivity and resource efficiency.
This is where drip irrigation comes in and is changing the global agricultural
62
economy by allowing farmers to produce more calories per hectare and cubic
meter of water.
Reduce the impact of drought and climate change on food production.
Avoid contamination of groundwater and rivers caused by leaching of
fertilizers.
Supporting rural communities, reducing poverty, reducing migration to
cities.
63
RECOMMENDATION AND CONCLUSION
The dissertation concludes the rational usage of water and land resources
separately as well, there are shown the ways of improvement of the economic
efficiency. This dissertation represents information about the experience of
rainfed fields, which plays a pivotal role in the separate regions and countries all
over the world. In case of soil management it should be mentioned that the
direct and indirect benefits such as the food security, environmental protection
and economic benefits exist in agricultural systems. In the terms of water
resources there are various tools implementing by the authorities for the water
conservation and to increase crop growth. In our daily society the role of drip
irrigation as the means of water protection is crucial and it will lead to the
rationalism. Furthermore, the following calculation relating to the overall
agronomic efficiency, consideration of various components of the denominator
and the volume pertain to the same unit area are the main indicators of water
efficiency.
In the regard of Azerbaijan, our country should continue to take necessary
measures. Since, a good condition of natural and climatic features stimulates the
development of agricultural sphere; there is a need to implement specific
programs and strategies for the keeping of scarce resources efficiently.
Therefore, taking into account the economic importance of these resources
ensure the health living conditions of the population, as well as create
opportunities for future generations.
It is the sacred and urgent task of all of us to restore and increase the fertility of
our lands for the sake of their health, protection and efficient use, as well as to
produce ecologically clean and high-quality products.
The conducted studies on the problems of economic efficiency of using the
resource potential of agriculture have shown that, both in its interpretation in the
economic literature and in the mechanism of its use in practice, there are
different approaches. The main provisions of our approach to the study of this
problem and the conclusions arising from it are as follows:
64
1. In the conditions of market relations, the relevance and importance of the
efficient use of natural resource potential is increasing, which is closely related
to the solution of the problem of comprehensively meeting the needs of the
population in food and industry in raw materials. In this regard, the issues of the
efficiency of the use of natural resource potential in agriculture require a
refinement of the theoretical and methodological aspect, and require alternative
solutions to this problem.
2. Conducted theoretical and methodological studies of the effectiveness of the
use of natural resource potential made it possible to identify the essence and
systematize its elements that affect the further development of the agrarian
economy. With this in mind, the concept of natural resource potential should be
understood as a wide range of natural resources (land, water, forest, biodiversity,
etc.), which play an indispensable role in improving the quantitative and
qualitative parameters of agriculture and the agrarian economy as a whole.
3. An analysis of the current state and the level of use of natural resource
potential in agriculture of the republic shows that they are generally aggravated,
which leads to a deterioration in the use of agricultural land. Erosion processes
are currently observed on 45% of agricultural lands, 1332.5 thousand hectares
are saline to varying degrees (including 220537 hectares very severe), 1339, 0
thousand hectares (including 8450 ha severe) are saline to one degree or another.
In this regard, the problem of increasing the efficiency of the natural resource
potential will be solved if the degradation processes of the earth are prevented,
technogenic pressures on nature are minimized, and the transition to energy and
resource-saving promising technologies is carried out.
4. In conditions of high population growth (according to some data, the
population of the republic in 2010 can increase up to 8 million people and in
2016 up to 10 million people) and land shortages (for every inhabitant of the
country there are 0.10-0 0.08 ha of arable land and 0.07 ha of irrigated arable
land) and an increase in the needs of the population for agricultural products, the
rational use of available land resources becomes a necessary process. To this
65
end, it is proposed to take into account the distinctive features of demographic
growth, which are exacerbated by the limited effective use of the natural
resource potential in the republic.
5. In the conditions of increasing degradation of land, water and other resources,
there is a need to disclose the principles of resource use, which can become the
most important factor in increasing the efficiency of using natural resource
potential. Based on this, the paper proposes to implement a number of
principles, among which the most important may be the principles of scientific,
sustainability, ecosystem, optimality, payment, socio-ecological and economic
orientation and responsibility.
6. In a market economy based on commodity-money relations, natural resource
potentials become one of the most important means of production. Therefore,
natural resources must have economic value in all cases of its use and be
recognized as an economic good. According to this principle, the right of
everyone to access to paid use of natural resources is recognized, which is an
important approach in achieving its effective use. In this regard, the main
elements of the paid use of natural resource potential in agriculture may include
the following main instruments of influence: the introduction of paid land use
(land tax, rent, compensation payments, fines and sanctions), payment for water
use (payment for the use of water in agriculture, payment for the use of water
bodies), payment for the use of forest resources, etc.
7. In order to overcome negative trends in solving the food problem, it is
advisable to have a comprehensive program for the greening of agriculture. In
this regard, one of the most important reserves for improving the efficiency of
land use in agriculture is the implementation of soil improvement measures. It
should include, first of all, the introduction of scientifically based crop rotations,
leaching of saline lands, the use of organic and mineral fertilizers, minimization
of technogenic impact on soils, biological methods of plant protection, etc.
8. It is well known that the application of mineral fertilizers and the prudent use
of pesticides is one of the important factors in increasing the productivity of land
66
resources. On the other hand, their excess use is harmful to human health,
wildlife and the environment as a whole. As you know, the soil serves as a
habitat for a huge variety of decomposer organisms (it has been established that
a 30-cm soil layer with an area of 1 m2 contains more than 1 trillion
microorganisms), which ensure the return of dead organic elements to the
environment, that is, nutrients, the available reserves of which limited in nature.
Unfortunately, it is these organisms that are the first to die as a result of tillage,
the application of mineral fertilizers and the use of pesticides. In this regard, one
of the ways to solve this problem is the development of "organic" agricultural
production (the use of organic fertilizers, minimal tillage, the use of biological
methods of plant protection, etc.), which is the most necessary and effective in
terms of increased soil degradation processes.
Measures that contribute to a more complete and efficient use of the main
means of production in agriculture can be grouped into the following
groups.
1. Inclusion in the production use of each hectare of land assigned to farms; land
should not be allowed to fall out of economic circulation. In farms of all
categories which indicate that there is a significant reserve for increasing
agricultural production.
2. Increasing the economic fertility of soils. This is primarily irrigation and
drainage, land reclamation, the use of fertilizers, the development of crop
rotations, the surface and radical improvement of meadows and pastures.
3. Preservation of fertility and soil protection: field-protective afforestation, soil-
protective technologies and crop rotations, a system of measures to combat
water and wind erosion.
4. Rational use of the economic fertility of soils: the use of the most productive
varieties, the improvement of seed production, the improvement of plant
placement patterns, the observance of the optimal timing of agricultural work
and its implementation with high quality, the fight against plant diseases, pests
67
and weeds. The activities of this group do not directly affect the agrochemical
properties of soils, but contribute to a better use of soil nutrients by plants.
5. Organizational and economic measures: improving the structure of sown
areas, taking into account market conditions, deepening specialization, applying
progressive forms of organization and wages, improving forms of management,
etc.
68
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